May 19, 2020

[INFOGRAPHIC] 15 companies illustrate the risks and rewards of saying no to acquisition

Mergers and acquisitions
Cinch Translations
2 min
[INFOGRAPHIC] 15 companies illustrate the risks and rewards of saying no to acquisition

Acquisition is common to the tech and entertainment industries, and today is no different. Video game publisher Activision announced that it has acquired King—the developer behind the massive casual gaming hit Candy Crush Saga—for a staggering $5.9 billion.

Acquisitions are always a risk, and this infographic from Visual Capitalist perfectly illustrates the risks that come with even an intensely lucrative takeover bid. In some cases, rejecting a takeover to stay solo is the right choice—Mark Zuckerberg could have cashed out to Yahoo in 2006 for a billion dollars and let Facebook quietly go the way of Flickr, but by staying the course he steered his brand to be the social media powerhouse it is today. Groupon, on the other hand, would have been better off selling to Google for $6 billion in 2010 when it had the chance—today it’s valued at closer to $5 billion, a substantial amount but a loss compared to what could have been.

In today’s case, who got the better end of the deal? Was Activision right to offer such an amount for the developer, and more importantly was King right to accept the deal and commence with the merge? $5.9 billion is an awful lot of money, but on the other hand Candy Crush is quite a money maker itself—Kotaku notes that the mobile game reaped $1.33 billion in revenue just within 2014. Is King making the best decision to cash out now, or could it have made more money in the long run on its own? Only time will tell. 

[SOURCE: Visual Capitalist]

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